An article from Bloomberg.com discusses the theory that banks are starting to approve (or at least consider) more short sales. If you recall my post on “Should I Buy a Short Sale?” you know that short sales can be fraught with complications, may not actually happen in the end and are definitely not for someone looking to close on a property quickly.
The Bloomberg article starts out with an example of a short sale property that was on the market for TWO years and had multiple offers which eventually fell through as buyers moved on to other properties.
But now Wells Fargo, B of A and Chase have all hired additional staff to try and expedite short sales.
Although not surprisingly, it appears that the taxpayers are going to take another one on the chin in this whole “mess.” Lenders and loan servicers may get up to $2,000 of taxpayer funds to close a short sale. Bloomberg goes on to explain that “The Treasury Department” would pay delinquent homeowners up to $1,500 to move out, $1,000 to the loan servicing company that accepts that sale and $1,000 to “help settle a second mortgage or subordinate lien.” The lender must then also agree to release the borrower from all responsibility regarding that debt.
Of course I’m curious as to whether or not Bloomberg actually thinks that money grows on trees at the Treasury Department because it’s not the “Treasury Department” that is paying for these incentives it’s the taxpayers.
And of course the problem still exists as to whether or not everyone else who is owed money on the property will agree to forgo what they are owed. This includes the lender who holds the 2nd mortgage, the HOA and the mortgage insurer.
My personal problem with short sales is that I haven’t seen a single one that was in decent shape. At least with the foreclosure the new owner (the bank) usually comes in, cleans up and makes some minor repairs. Short sales ALL look the same to me: they look like the occupants knew they weren’t going to sell, didn’t care about the home anymore and didn’t bother to clean much less fix anything, and leave the home in complete disarray when they finally move out because they feel absolutely no obligation to the property anymore. Renters have more incentive to keep the property intact at least because they’re hoping to get their deposit back.
So there you have it, the latest on short sales. It’s a good article (even if they seem to think money magically appears at the Treasury) and you should read it.
Current Broomfield Short Sale data: 24 active, 18 under contract, 51 properties sold in Broomfield as a short sale from January 1, 2009 to today, where they spent an average of nearly 6 months on the market, and an average (rough avg.) of 37 days under contract before they closed. I was actually surprised at how quickly they closed once under contract BUT understand that does not include the amount of time the potential buyer waited to hear back on their offer.
Current Westminster Short Sale data: 44 active, 30 under contract, 61 properties sold in Westminster as a short sale from January 1, 2009 to today where they also spent an average of nearly 6 months on the market.
Current Thornton Short Sale data: 87 active, 58 under contract, a whopping 136 properties sold in Thornton as a short sale from January 1, 2009 to today and spent an average of 138 days on the market.
Current Northglenn Short Sale data: 12 active, 6 under contract, 16 properties sold in Northglenn as a short sale from January 1, 2009 to today. They also spent an average of 6 months on the market.
Note that in Colorado if a listing agent even thinks it is likely or possible a home being offered for sale will be considered a short sale it must be disclosed on the MLS.
Based on information from Metrolist, Inc. for the period January 1, 2009-December 12, 2009. Note: This representation is based in whole or in part on content supplied by Metrolist, Inc. Metrolist, Inc. does not guarantee nor is in any way responsible for its accuracy. Content maintained by Metrolist, Inc. may not reflect all real estate activity in the market.
photo credit: pasukaru76
